Ever since the Government allowed operation of private carriers as part of its open sky policy under the overall economic reforms agenda that began in the early 90s, first the then PSU domestic carrier Indian Airlines began losing revenue. The international arm Air India held aloft for some time but soon started giving in to pulls and pressures from both the industry and the Government. The merged entity Air India may now be in deeper mess.

The immediate cause for concern is the soon to be announced scrapping of what is known as the 5/20 rule which may give a body blow to Air India. Under this rule, an airline is required to operate for a minimum of five years and must have at least 20 aircraft in its fleet before it is allowed to fly on international routes.

Abolition of this rule will be a game changer. Private carriers, particularly the new entrants, will hugely gain from it at the cost of Air India. The beneficiaries will be Vistara, a joint venture of Tata Sons and Singapore Airlines which just completed one year of operation this month, and Air Asia both of whom are waiting for the announcement. Indeed, the industry sources claim the two have been putting pressure on the Government.

Air India had all along been opposing the proposed abolition of the 5/20 rule. After all, it is going to be affected most. But in doing so, Air India was only exercising its right as the national carrier. Besides, no country allows fresh entrants to fly international routes at the expense of their own national carriers.

The civil aviation ministry initially supported Air India in opposing the move. Former Chairman of Air India, Mr Rohit Nandan, had written to the Civil Aviation Minister opposing any move to do away with the 5/20 rule. Suddenly, however, Air India buckled under its new Chairman and Managing Director Ashwani Lohani. The Civil Aviation ministry now claims that Mr Lohani has formally written to the government supporting the scrapping of the rule.

By all accounts, the stage is now set for its abolition in the new civil aviation policy that is slated to be announced shortly. What made Air India change its stand? Did is buckle under pressure from the corporate lobby? Was political pull exerted to benefit certain carriers? Significantly, even older private airlines such as Indigo, Jet Airways and Spicejet, which have already fulfilled the criteria, are also not in favour of scrapping the 5/20 rule.

Significantly, while the ministry’s overall opinion was not in favour of the abolition, civil aviation minister Ashok Gajapathy Raju and minister of state Mahesh Sharma have taken a different stand. Both of them have reportedly said their “personal opinion” was that the rule be scrapped. Aviation watchers believe that Air India has buckled under pressure.

This has touched off a muted debate in the aviation circles as to why the public sector carrier is always made to suffer for the benefit of the private carriers. A former civil aviation secretary who refused to be quoted, for example, admitted that he was forced by the then government authorities in the 1990s to permit the entry of Jet Airways at the cost of the the Indian Airlines despite adverse reports against it. It is common knowledge that Jet Airways, subsequently, crippled Indian Airlines by taking most of its senior and experienced pilots while the authorities blinked. Old timers will also recall yet another private airline called East West Airline which made a blazing entry into the Indian skies using similar tactics inflicting damage to the Indian Airlines.

Is history repeating itself? The NDA government needs to be careful. Competition is always good for business, but national carrier Air India should not be seen in the light of an ordinary business venture. Air India is pressed into service for national causes like emergency evacuation as it happened during the Gulf conflict, national calamities etc. Can the private carriers be forced to do such jobs? The answer is obvious no.

Of course Air India needs to retain its business edge. But the government of the day must help in doing so. By withdrawing the 5/20 rule, the government will be only serving the interests of private airlines. Some private airlines, like Jet Airways notably, are already operating international flights having fulfilled the norms. Let others like Vistara and Air Asia fit the bill before being given green signal for international flights. (IPA Service)